This study aims to examine the role of dividend policy in mediating the
effect of the current ratio, debt to equity ratio, return on equity on stock returns.
The object of this research is all manufacturing companies listed on the Indonesia
Stock Exchange. The data used is secondary data in the form of annual financial
reports for the 2018-2020 period. The sample in this study was 34 companies
from 195 manufacturing companies that matched the criteria based on purposive
sampling technique. The data analysis technique used is multiple regression
analysis and Sobel test. The results of the analysis show that return on equity has
a positive effect on dividend policy, the current ratio and debt to equity ratio have
no effect on dividend policy. Meanwhile debt to equity ratio and dividend policy
have a negative effect on stock returns, current ratio and return on equity have no
effect on stock returns, dividend policy is not able to mediate the effect of current
ratio and debt to equity ratio on stock returns, but can mediate the effect of return
on equity to stock returns.